Written by Jackie Tan. Jackie is part of fundMyLife, the platform that connects financial planning questions to the right advisers.

Social media is often described as yelling into a crowd of people. Paying for social media ads is akin to getting a bigger and louder loudspeaker – you’d reach out to more people. However, with proper digital marketing techniques, it turns your loudspeaker into a walkie-talkie that buzzes the right messages to the right crowd.

There’s almost no excuse for a company to maintain a social media presence to get ahead of competitors, and insurance agencies and agents are no exception. However, it was quite surprising that they still do not leverage the power of social media. In our (casual) survey of Facebook pages of insurance agents, we find that the adviser pages surveyed have a median of 125 fans and 1% 7-day engagement rate, implying a low reach compared to the industry average of 5%. Hence, there’s a need for a marketing class for insurance agents.

As such, it was a delight when fundMyLife stumbled across an Udemy course titled “Facebook Marketing for Insurance Agents”.

What is that? A Marketing Class for Insurance Agents?

As the name suggests, it is an online course containing a series of lectures that aims to guide insurance agents market themselves online on Facebook.

It’s taught by a digital marketer named Jay from Malaysia, but we thought that the insurance scene in both countries were similar enough that agents from Singapore would benefit from the course as well. The course is 5 hours long, and is composed of several parts in the syllabus:

Welcome

Building Your Online Presence

Advance [sic] Facebook Strategies

Take Action Now

Buying & Building A WordPress Website

A Real Entrepreneur Journey

Step by Step Guides

So far so good, let’s dive into it.

The Content

The lecture starts with an introduction into what digital marketing is, and how it differs from traditional marketing. In the part on building an online presence, he shares a strategy called the ATOM strategy: Always Think Of Me and to do that, the marketer has to 1) Educate, 2) Share (Case Study, Testimony), 3) Part of Community, 4) Appear Live In Person, 5) Humor.

The points on establishing an online presence are relatively self-explanatory; those are wise words as it helps to engage your audience and doing so establishes yourself as an opinion leader. These actions are simple in theory, but it’s exceedingly challenging to execute.

Creating content is hard. There is a severe shortage of consumer education when it comes to products, case studies that highlight interesting situations that consumers faced, and opinion pieces of agents on their respective speciality.

Next, he proceeded to share some advanced Facebook strategies – he shares some of the common pitfalls that novices do. For example, one mistake that people tend to do is share too much information in the picture. He gives an example of a post with too many words.

Split testing helps the marketer discover which image, text, or caption used is more effective in targeting a particular audience. Screengrab from online course.

Another common mistake is pressing the “Boost Post” button to promote a post instead of setting up a proper ad campaign. Indeed, you miss a lot of opportunity for further targeting and experimentation when you merely boost posts.

Moreover, he suggests that advisers set websites up for email collection for the subsequent steps in the lead generation funnel as the email collection helps and that embedding a Facebook pixel aids in tracking and segmenting the Facebook audience further.

It is important to get people who are not just in your geographical area and are in a certain demographic, but also people who have seen your posts and/or website. Screengrab from online course.

Sound Advice So Far…

Jay also introduces the idea of a marketing funnel, a series of steps designed to convert strangers online into eventual leads and customers.

While this marketing funnel is sound in theory, it can be quite challenging to implement with regards to insurance. Screengrab from online course.

He advises to build a website to offer something in exchange for the website visitor’s contact, such as an e-book or a guide, and let the product be an introduction to the insurance agent. Once the visitor is convinced that the agent’s expertise is sound, and has a taster of his/her advice in the e-book and website, the visitor can then be converted into a lead and eventually a customer.

The course ends off with a step-by-step guide on buying and building a WordPress site (1h 28 mins) and a sharing on his entrepreneurship journey (1h 5 mins). We won’t cover those, but the former is very useful if you don’t know how to create a WordPress site and the latter is inspiring; it is a call to action to put into practise what you learned.

That’s All Folks

Aren’t you glad we spent the $18 so you don’t have to? To summarize, here are the pros and cons of what we found from the course:

Pros:

Covers basic ideas surrounding digital marketing

Inspiring life story of the lecturer at the end of the course

Step-by-step walkthrough on buying a WordPress site

Shares precaution to avoid classic mistakes

Teaches tried and tested digital marketing techniques

Cons:

Has breadth, and less depth

Incomplete case studies

Verdict: Like nasi lemak without sambal, or chicken rice without the fragrant rice, this Udemy course lacks a certain punch that makes it a complete dish. As such, you will have to do more research if you’re an insurance agent looking to modernise your sales channel after this course.

You’ll just have to find an alternative course online to study – preferably free – or hire someone to help you out.

fundMyLife is a platform that aims to empower the average Singaporean to make financial decisions confidently. We also connect consumers to the right financial planners in a private and anonymous manner, based on their financial planning questions. Follow us on our Facebook page to get exciting updates and your dose of finance knowledge! Let us know what you want to know about finances or something that you wish your friends knew!

Post-script: What is 7-day engagement rate?

The 7-day engagement rate is a high-level metric used to approximate the level of engagement (duh) in a Facebook page. Engagement is defined as actions that a user takes on your page, e.g., liking, reacting, or sharing. A high 7-day engagement rate demonstrates consistent interaction with the content on the Facebook page, and implies that the followers of the page are high quality. There are several tools out there to measure this metric – we used Meltwater’s Likealyzer to analyse the pages.

Written by Jackie Tan. Jackie is part of fundMyLife, the platform that connects financial planning questions to the right advisers.

A few years ago, a team of researchers from the University of Innsbruck ventured across Austria to fix their computers, which they purposely broke. They were conducting an experiment to ask a very simple question: does insurance make merchants and vendors dishonest?

To do this, the experimenters bought several laptops and damaged the RAM. Fixing it is a small matter, and it would take a short afternoon to fix it at little cost. The team then went to 61 randomly chosen stores in various states in Austria and asked repair shops to fix their laptop.

Their hypothesis was that informing the repairmen that they have insurance results in more repair than needed, and overcharging of their services.

Hence, for each repairman, they would say either of these phrases after sending their laptop for repairs:

“I will need a bill for the repair” (CONTROL group)

“I will need a bill for the repair because I have insurance that covers the repair costs” (INSURANCE group)

At the end of the experiment, the experimenters found that the repairmen charged twice as much and worked twice as long for the INSURANCE group compared the CONTROL group. The results were published in a research article damningly titled “Insurance coverage of customers induces dishonesty of sellers in markets for credence goods”.

This experiment, while simple in nature, sheds light on why the recent proposed benchmarking by the Ministry of Health in Singapore is a great idea.

Wait a minute.

What does fixing laptops have to do with healthcare? Ever paid $100+ for a simple flu visit to the GP? However, before we go there, let’s take a quick look at a bit of Singapore’s history.

History of Fee Guidelines in Singapore

In 1987, the Singapore Medical Association released a fee guideline for medical procedures. In theory, the transparency is a good thing since both doctors and patients would know the price of the procedures offered. However, in 2007, the association withdrew the guideline as it was construed as anti-competitive, i.e. it presented a possibility of price fixing by doctors since doctors released the guideline themselves.

A decade later, the Ministry of Health recently introduced a fee benchmark which performs a similar function as its predecessor without the complication of being anti-competitive. Doctors, patients, and insurance companies are welcoming this change in 2018.

Why the Need for Benchmarking?

Presumably, this was rolled out in response to the rising trend of insurance claims by patients with riders in their integrated shield plans. Insurance companies are facing losses as medical claims increase in costs every year. The Life Insurance Association points to three trends that exacerbates this: 1) higher usage of IP and IP riders, 2) increasing number of claims for private medical treatment, and 3) higher doctor fees.

Why would the benchmark and the implied transparency make life a little easier for both patients and insurance companies? We already have the answer implied by the experiment – having fee transparency gives consumers insight into how much a procedure is usually charged.

Credence Goods and the Asymmetry of Information

Both repair services and medical treatment belong to type of good called credence goods. Credence goods are a type of object or service with qualities that cannot be observed by the consumer after purchase. It is hard for the consumer to judge the impact of the object/service, be it good or bad.

However, only the seller knows the impact which creates an imbalance of knowledge between the seller and consumer. In a fancier term used by economists, this imbalance of knowledge is called “asymmetric information”. Examples of credence goods include education, repairs, vitamins, and medical treatment.

Hopefully, with the benchmark going forward, patients can assess whether they’re being charged reasonably. Having a baseline will allow the market to operate more effectively, resulting in a win-win with all involved.

That’s All Folks!

We here at fundMyLife hope you found the story as fascinating as we did, since it was a simple case study that sheds light on a larger phenomenon.

fundMyLife is a platform that aims to empower the average Singaporean to make financial decisions confidently. We also connect consumers to the right financial planners in a private and anonymous manner, based on their financial planning questions. Follow us on our Facebook page to get exciting updates and your dose of finance knowledge! Let us know what you want to know about finances or something that you wish your friends knew!

Post-script: The Experiment Results

In case you’re interested to know more about the results – two astonishing figures sum up the entire study:

Figure adapted from the research paper by Kerschbamer et al.

Ooh, the graph looks pretty but what does it truly mean?

The top graph shows the distribution of repair prices in Euros between the two groups. An intuitive read of the graph is that the repair prices for the CONTROL group (blue line) range from 0 to 150 Euros. On the other hand, the repair prices range from 0 to 275 Euros when the experimenter indicated that there is INSURANCE involved (pink line).

The bottom graph shows the distribution of working time charged by the repairmen. In the CONTROL group the working time charged is at most 1 day, whereas for the INSURANCE group the range of working time charged is larger, all the way to 2.5 days.

Granted, this experiment was conducted in Austria, and there was a small sample size of 61 observations across 17 states. Nonetheless, it provides compelling perspective that there is a risk of overcharging in situations where there is an asymmetry of information.

Written by Ryan Teo, edited by Jackie Tan. The opinion series is dedicated to sharing our advisers’ thoughts and opinion on personal finances. Ryan Teo is a part of fundMyLife, the platform that connects financial planning questions to the right advisers.

“Investing in the stock market is just like gambling.”

Or so the saying goes. And people develop a fear of investing from thinking that way.

It depends on our perception on how we think about it.

The problem is that a lot of people do treat the stock market like a casino, hoping to win the big bucks quickly.

Let me ask you a question

Let’s say a friend who approaches you. He says:

“Eh bro! I’m opening a cafe that’s based on the latest dessert trend from Tokyo. It’s huge in Japan. Guarantee make a lot of money one la. If you interested, you can invest $10,000 in my business.”

What will you do? Are you going to hand over the cash to him just like that? I’m sure you will expect some sort of return of investment and do some research on your own.

So you will probably ask questions such as:

What are your costs/expenses?

What are the type of food will you be serving?

What are the profit margins?

When will the business be projected to break even?

What are your staff costs? And so on.

Now, the question is whether you would do the same when you invest in the stock market.

Why don’t we ask ourselves these same questions when we invest? Do you research on the business fundamentals? Most people don’t. They just take the word of friends or analysts and follow the latest stock tips.

One of the most common misconceptions is that when the share price of a company falls, it means that the business is failing.

For example, if the price of Singtel shares starts to drop every day, it doesn’t mean that a couple of shops is closing down every day.

On the contrary, it offers us the opportunity to invest or to buy a part of the business at a cheaper price. Hopefully, you can be a part of the company’s long-term goal.

Investing isn’t optional

The truth is that many people haven’t made peace with the fact that investing isn’t optional. In life, there are only two main types of income. One is from your work or business; the other is from your investments.

If you only have money from working ONE job or have ONE business, you only have ONE income stream.

When I ask others why they were not investing, the one reason that keeps repeating is fear. With the rising cost of living in Singapore, having only one stream of income is also taking a huge gamble. However, think about it this way – the wealthiest people in the world got rich by building successful businesses.

As such, people can either start a business themselves which carries a lot of risks in itself and maybe capital, or they can be a partners of a business.

Essentially, that’s what the stock market offers us – the opportunity to partially own a business.

Sure you’ve heard the saying before “Don’t put all your eggs in one basket.” So, why then do we stubbornly accept a single source of income?

Isn’t that more of a gamble?

If you have any questions to ask me, I’m happy to answer them over at fundMyLife!

fundMyLife is a platform that aims to empower the average Singaporean to make financial decisions confidently. We also connect consumers to the right financial planners in a private and anonymous manner, based on their financial planning questions. Follow us on our Facebook page to get exciting updates and your dose of finance knowledge! Let us know what you want to know about finances or something that you wish your friends knew!